It's never too early to start saving
A generation of millennials are upping the stakes when it comes to saving with disciplined financial behaviour.
Growing up in the wake of the recession and tough economic times, new research from online savings provider, GE Capital Direct reveals how the millennial generation are more disciplined savers than Gen-Xers or Baby Boomers.
The study of over 2,000 British savers found that 18-24 year olds are putting away nearly a third of their income per month – the highest out of any age group, followed by 25-34 year olds who save at least a fifth of their salary each month. This compares with Gen-Xers, aged between 45-54 years old, who save a tenth of their monthly income.
With an appetite for discovery and adventure, the study found that 18-24 year olds are three times more likely to embrace the millennial proverb “You Only Live Once” (YOLO) and save for aspirational life experiences – 13% compared with the average of 4%.
Buying a house remains high on the agenda for this generation with 29% saving to get on the property ladder. On average, millennials estimate they need around £50,000 to live by the YOLO mantra – almost a third more than the £37,000 they think is needed to pay off a mortgage.
The findings highlight more than twice the number of 25-34 year olds are worried about the future because they don’t think they are saving enough, compared to a quarter of ‘Silver Savers’, those aged 65+. Perhaps because of this uncertainty, 42% of 25-34 year olds treat saving like a bill and save every month without fail.
Commenting on the generational savings research, Sheragh Beirne, CMO and MD Retail Banking at GE Capital UK, said: “Young adults these days work hard, save hard and are reaping the rewards of adopting a good savings habit early on through once-in-a-lifetime experiences. Despite being more likely to save for a rich array of life experiences than older generations, millennials remain keen to get their foot on the property ladder. That is why it’s important for young adults to consider accounts that offer good interest rates requiring some notification for withdrawals to limit impulse buys and purchases.”
Baby Boomers face savings crisis with a third not saving anything at all
The research also shows that almost a third of Baby Boomers, those aged 55-64, admit to not saving at all – the highest out of all age groups. In addition, this same generation saves the least - putting away £180 per month compared to the average of £235.
Sheragh continues: “Britain’s Baby Boomers are getting a wake-up call, being sandwiched between boomerang kids and ageing parents, with many finding it difficult to put money aside. The trick for this squeezed-middle generation is to look for a mixture of short and long term savings accounts that can provide a ‘rainy day’ buffer or for a well-deserved holiday.”
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